Pensions Up By 80%
THE Social Security and National Insurance Trust (SSNIT) has increased the minimum pension from ?50,000 to ?90,000 per month.
The review, which represents an 80 per cent increase, takes effect from January 1, 2003.The Head of Public Affairs of the Trust, Mr K. Osei-Bimpong, who disclosed this in an interview in Accra yesterday, said under the new indexation formula being implemented for 2003, all other SSNIT pensioners have been awarded and increase of ?31,313.25 across board and a further 13 per cent.
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The increases, therefore, range from 13.25 per cent to 80 per cent.Mr Osei-Bimpong added that with the reviews, pensions will range from ?90,000 to over ?12 million a month. In the 2001 review, the minimum pension was raised from ?15,000 to ?50,000.
He said the increases are in accordance with the social security law and added that since 1992, the trust has reviewed pensions annually.Mr Osei-Bimpong said the reviews have been based on average increases in salaries of contributors during the previous year.
On why all the increases were not made across board, he said it was observed that the across board percentage increases made the reviews regressive as the gap between the highly and the lowly paid pensioners widened in absolute terms.
He said to address this problem, a redistribution formula which puts emphasis on the principle of solidarity in social insurance has been pursued in the last two indexation exercises."
The Head of Public Affairs said the approach, to some extent, has improved the lot of the less fortunate pensioners.Mr Osei-Bimpong said the low salaries of the average worker and the fact that some employers under-declare the earnings of their employees continue to impact adversely on the pensions.
He said the trust is aware that some contributors also declare salaries far below the prevailing minimum wage. He said the trust is concerned about such practices because it is its expectation that pensioners receive pensions that are commensurate with the wages they earned when in active service.
Mr Osei-Bimpong entreated all employers not to under-declare the earnings of employees, since such a practice impacts negatively on the pensions of employees and expressed the hope that this will help the trust to solve the problem of low minimum pension.
?Employers should not collude with their employees to under-declare their earnings? he advised, adding that,? employers are also advised to contribute the basic earrings and allowances of their employees and to contribute on the consolidated earnings to ensure higher pensions at retirement?.
He said to sustain meaningful guaranteed pensions, employers who pay contributions on behalf of contributors are expected to contribute on at least, the prevailing minimum wage.